The calculator has four variables. Enter the four variables and a calculator will determine the size of cash nest egg.
- P&I Payment: Deposits equal to the Principal and Interest portion of former mortgage payments.
- Earning Rate: The expected average over the entire period. (Earnings are compounded daily.) Baseline is 4 percent, even though 6 percent is traditional long term rate.
If rate is 4 percent, for instance, enter it as .4, and not .04 or 4.0. - Length of Time: The number of monthly deposits.
- Starting Balance: The amount in an existing account. (Starting with balance of zero (0) will reveal the pure economic value of P&I payments.)
- Cash Nest Egg: The amount produced by other four variables.
Actually, there are five calculators. The others are designed to let you start with any four variables and the calculator will determine the missing fifth, e.g.the earnings rate needed to create a certain size of nest egg for instance.
Note: You cannot copy and paste the amount from one calculator to another because it has embedded formulas. Must hard-input the amount.
